Travel Insurance to Buy or Not to Buy

Twenty years ago, no one ever would have thought to purchase travel insurance. Dare an agent or cruise representative mention the need for insurance unless they wanted the consumer to run in the opposite direction. Now, with media coverage of cruise catastrophes, flight cancellations, and travel horror stories, people are thinking twice about a backup plan. Whether they want to ensure their trip, possessions or health, they are packing travel insurance. And just as important as being protected, packing the right insurance is key.

Different Types of Travel Insurance

Flight and Trip Cancellation Insurance

When you’re thinking about this type of coverage, it’s important to think about your investment versus the price of the insurance. If you’re looking at an ultra-bargain, super-sale flight to Atlantic City, you’re not going to need this. For something like a $10,000 cruise in the Mediterranean, I would recommend purchasing cruise travel insurance.

If you miss your trip from unforeseen circumstances; death in the family, getting sick, car accident, you’re going to need coverage. What if the excursions change or the cruise has to change its course? Worse, what if you get sick on the cruise. You’re going to need outside insurance, as in don’t buy it from the cruise brand. Their insurance goes out the window if their cruise brand goes out the window.

Travel Health Insurance

Many people think because they have health coverage in the states that they are covered anywhere. Not the case. Especially on cruises. If you leave the U.S., like on a cruise, you are no longer covered by your health insurance. Given that most cruises that port from the U.S. aren’t even U.S. flagged vessels, this should be your first red flag.

Consequently, if you need to be flown back to the states due to an emergency illness, you are also not covered by your health insurance. This is why obtaining a travel insurance policy with travel health insurance is also very important and essential for anyone who travels. Not to mention, if you’re in an underdeveloped country, many hospitals will admit you without concern of coverage, then keep you until you pay.

When you are shopping for travel health insurance, make sure they provide initial treatment and stabilization then send a medically equipped and staffed jet to fly you to the doctor and medical facility of your choice. This is crucial. Many companies that offer this insurance will fly you to the doctor and medical facility of their choice.


Baggage Insurance

Most trip cancellation and interruption policies cover lost, damaged, and stolen bags. This is essential. Since the Warsaw Convention only covers $9.07 / pound for checked bags and $400 for passenger and unchecked bags. As of Feb. 28, 2007, U.S. airlines’ liability for lost or damaged luggage increased to $3,000 per passenger from the current limit of $2,800. Sounds good, right?


Think about this. They exclude jewelry, furs, negotiable financial documents, pretty much anything worth something. Then they love “depreciation”. Oh, and the $3,000 limit is per incident, not per bag.
You can though, and most people don’t know this, ask for “excess valuation” at the ticket counter. It provides up to $5,000 additional coverage, at a rate of about $1 per $100 in value. Purchasing this means you’ll have to describe what’s in your bag, but well worth it.

To Buy or Not to Buy

First, think of your investment versus the amount you will pay out for insurance. Think of where you are going, will the area be underdeveloped? Think about the form of payment. If you buy an airline ticket with your credit card and it’s canceled, you’re covered, since you bought a contract for service you didn’t get.

Look for third-party travel insurance like cruise travel insurance, one that is not affiliated with the company you are getting your travel arranged with, and someone who is licensed in your state/country.

If flight or cruise delays make you want to cancel, you may be out of luck. Read the fine print, as with some policies, more than half of your vacation has to be delayed before you can cancel and be covered.

To find the best quotes on insurance, use a Health Insurance Finder to get the best comparisons tailored to your preferences.

About Christa Thompson

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Christa Thompson is the Founder and Chief Editor of The Fairytale Traveler. She started traveling the world in 2003 when she attended a summer abroad study at the University of Cambridge in England. Since then, her wanderlust has been fierce. Her three passions in life are her son, traveling, and being creative. The Fairytale Traveler brand gives Christa the opportunity to do all of these things and to live intentionally every day. "It's never too late to believe in what you love and to pursue your dreams." -Christa Thompson

5 Comments on this post

  1. I’m of two minds about this. On the one hand, the insurance industry is the biggest scam job around and they’ve fed the fear about what can happen to you overseas better than Bush sold Americans on invading Iraq. And then of course you can get insurance, have peace of mind, and still get screwed because unless you’ve spent a month reading the fine print then you’re open to some frigin clause. That’s how insurance companies make money.
    Then, on the other hand, as a blogger you can’t advocate NOT taking insurance – that would be irresponsible. Personally, I would honestly rather spent $5000 for an operation I really need than $3000 for insurance I will not need. But of course you never know what can happen…
    So I’m of two minds about it. It’s actually a subject that just really pisses me off.
    Frank (bbqboy)

    BBQboyFrank / Reply
    • 3k!!! Holy bananas!! I paid $300 over 12 months lol for a huge trip once but 3k it a lot. Last trip I went on I paid $50. It really depends on what you’re insuring… but it should never ever cost 3k.

      • I don’t know how it works in the US, but here in Canada you need (or should) get Travel insurance to complement your provincial health insurance plan (which won’t cover you out of province). We’re covered by a work plan for the first 60 days of our trip, but they won’t cover after that. So I got a quote from a RBC, the biggest bank here and a large travel insurer – $2000 coverage for 9 months while overseas which covers basic repatriation, luggage etc. I honestly don’t care about covering bags or computers, I’m looking into it in case of major medical emergencies. But it’s expensive and its getting me upset.
        And of course I’m a resident of the one province that World Nomads doesn’t cover.
        I don’t understand the $300 for 12 months. Is that a supplement to a private health insurance plan?
        Frank (bbqboy)

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